ROXAS Holdings, Inc. (RHI) widened its net loss by 271% in the third quarter ending June, as unfavorable weather conditions depleted the supply of cane, affecting the sugar industry as a whole.
In a disclosure, the listed sugar and ethanol manufacturer reported a P287.58-million attributable net loss during April to June period, versus a net loss of P77.364 million recorded in the same period last year.
RHI swung to a P650.009 million net loss for the nine-month period, from a P2.114 million net income in the same period in 2018. The company’s fiscal year ends on Sept. 30.
Revenues during the third quarter were also 12% down to P1.506 billion.
“The sugar industry is currently faced with lower output and increasing production costs while sugar prices have remained low,” Pedro E. Roxas, chairman of RHI, said in a statement.
He noted that changing weather conditions have led to lower supply of cane for production, which triggered competition that led to higher cane prices. The threat of sugar importation has also put pressure on local sugar prices.
RHI President and Chief Executive Officer Hubert D. Tubio said these challenges also resulted in a shortage of bagasse, a dry pulpy residue collected after the sugar cane extraction. This is used as fuel for machines like electricity generators.
“RHI produced a significantly lower volume of refined sugar from 2.2 million LKg bags last crop year to 1.1 million LKg bags this crop year,” he said, adding that the company has already implemented actions to prevent the same problem to happen in the next crop year. One Lkg is equal to one 50-kilogram bag of sugar.
Mr. Tubio also noted that the company’s ethanol unit booked lower margins due to high feedstock costs at P12,500 per metric ton, as production increased during the period.
RHI Vice President and Chief Finance Officer Celso T. Dimarucut said the company is “now focused on reducing inventories, and collecting receivables to generate funds for capital expenditures and payment of maturing obligations.”
RHI, which is described as the largest integrated sugar business in the country, manages sugar miller Central Azucarera de la Carlota, Inc., ethanol producers Roxol Bioenergy Corp. and San Carlos Bioenergy; and RHI Agri-business Development Corp.
Shares in RHI went up 4.55% or 0.1 centavos to close at P2.30 apiece in the stock exchange on Friday. — Vincent Mariel P. Galang